Axis Mutual Fund has rolled out an ETF tracking Fund-of-Funds (FoFs). The new fund offer (NFO) is open for subscription since February 04 to February 18, 2022. Axis Equity ETFs FoF will be managed by Shreyash Devalkar. It is benchmarked against Nifty 500 TRI. Here are the key details of the NFO:
About the strategy
Axis Equity ETFs FoF intends to offer a combination of active and passive management strategies by investing predominantly in units of domestic equity ETFs of Axis AMC or any other mutual funds. While the fund manager will actively decide upon the allocation to a particular market-cap and pick the sectors or themes to invest in, the underlying exposures themself would be passive in nature due to the ETFs tracking the particular market-cap or sectoral/thematic indices.
Axis Mutual Fund has built a credible name for itself in equity fund management on the back of a solid performance record spanning over a decade, which is attributable to its bottom-up stock picking and quality orientation.
But given the investment mandate, this new fund will not benefit from the stock-picking skills of Axis' fund management team. On the contrary, the FoF layer wrapped around a set of ETFs will add a few basis points to the cost, taking some sheen off the passive proposition. Therefore, in its attempt to combine the benefits of active and passive, it may end up missing out on both. At this stage, we'd rather prefer to stick to the strong line-up of the fund manager-led active funds from Axis Mutual Fund over this new fund on offer.
About the fund manager
Axis Equity ETFs FoF will be managed by Shreyash Devalkar who is a Senior Fund Manager overseeing three actively-managed schemes at the AMC. He has over 16 years of experience in capital markets. Prior to joining Axis Mutual Fund, he has worked with BNP Paribas Mutual Fund (as a Fund Manager), IDFC Capital, JP Morgan Services India and Calyon Bank.
About the AMC
Axis Mutual Fund launched its first scheme in October 2009. 75 per cent of the AMC is owned by Axis Bank, while the remaining 25 per cent is owned by Schroders plc, a UK-based asset manager.
Axis Mutual Fund manages total assets worth over Rs 2,54,000 crore (as of December, 2021). The fund house currently has 22 open-end equity funds that together comprise assets worth over Rs 1,46,000 crore. The fund house currently has 10 passive equity funds (index funds, ETFs and FoFs) which together manage about Rs 4,200 crore, ranking it 11th in the passive funds space. All of the three existing FoFs of Axis invest in foreign equity funds.
Also read: Three questions you should ask before investing in an NFO
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